"This government is determined to make the country move forward, we will remove all red-tape and other obstacles to investment to ensure greater employment, people's satisfaction, more work and greater revenues for the budget which will have to be consolidated this year in a way that is perhaps not the most popular one or an ideal one, but is necessary," Milanovic said at the start of a government session.

"We will have to make a number of concrete and decisive decisions. We will be decisive, but will measure twice before we cut or add anything."

Milanovic's statement was a response to "justified reactions in the public", aimed at dispelling speculation about the introduction of property tax, an increase in the VAT rate, and the publication of the national register of Homeland War veterans.

Milanovic said that property tax existed in all European countries and that it was a "delicate matter" that no country had dealt with carelessly, so neither would Croatia.

It is in the state's interest to make order on the real estate market and that taxes be paid according to property value, which in Croatia is not the case now, the PM said.

"That kind of tax will never be drastic, but once introduced, it will burden many of us sitting on the government. Some of us more, and some less," Milanovic said, adding that when introducing property tax the government would take care of efficiency and of the need to prevent undeclared rental income.

"In Croatia today we have a situation where taxes are not charged on the largest portion of real estate and flats that are leased," Milanovic said, adding that that situation resulted in an increase in real estate prices.

"We want to set that right in the interest of citizens, taking care that it does not affect the middle class and that it is not a tax on holiday cottages," said the PM.

Speaking of the VAT rate increase, Milanovic said that it was necessary in order to stabilise budget revenues.

"We will do our best to protect people with poor financial standing. We don't want them to suffer" because of higher VAT rates, he said, adding that the government would introduce graduated VAT rates and lower the VAT rate for tourism services.

As for the war veterans register, Milanovic said it would be made public, but that its publication first required legislative changes.

Once we amend the relevant legislation, we will enable access to all general information, such as a veteran's identity, while everything else, such as a veteran's war path, does not need to be made public and can be available only to state administration, Milanovic said.

"We will publish the register, but the information that we consider potentially delicate doesn't have to be put on-line. But one's name and date of birth - yes, I'm sure that no one in this country has a problem with that," Milanovic said.

The PM also offered his best wishes to Orthodox believers who celebrate Christmas according to the Julian calendar.